U.S. stocks slip as China virus spreads, death toll spikes

By: The Associated PressJanuary 30, 2020Comments Off on U.S. stocks slip as China virus spreads, death toll spikes

Stocks moved lower on Wall Street in afternoon trading Thursday as a surge in the number of confirmed cases and fatalities from a virus in China stoked fears that the outbreak could slow global economic growth.

World health officials expressed “great concern” that the new type of coronavirus is starting to spread to people outside of China, which is essentially on lockdown.

Industrial companies also fell broadly. UPS skidded 6.2% after the package delivery company gave investors a disappointing profit forecast.

Most technology companies also fell, though solid earnings from Microsoft, ServiceNow and Lam Research helped check the sector’s decline.

Concerns about the spread of the coronavirus and its impact overshadowed mostly positive corporate earnings reports. There are currently more than 7,800 confirmed cases, mostly in central China, and 170 deaths, mostly in Hubei province.

Companies are increasingly issuing warnings over the potential impact to profits and revenue. Align Technology, which makes tooth-straightening systems, gave investors a weak profit forecast because of the virus. Starbucks has already held back on raising its forecast for the year and airlines are starting to curtail flights to Chinese cities because of weak demand.

KEEPING SCORE: The S&P 500 index fell 0.7% as of 1:24 p.m. Eastern time. The Dow Jones Industrial Average dropped 175 points, or 0.6%, to 28,559. The Nasdaq lost 0.8%. The Russell 2000 index of smaller company stocks slid 1%.

CLOUD COMPUTING: Microsoft rose 2% after the software maker handily beat Wall Street’s fiscal second-quarter profit forecasts on its growing cloud computing business. The company said that revenue from its Azure cloud computing business grew 62% percent. The company is trying to catch up to the leading cloud provider, Amazon, and received a big boost in October from a $10 billion U.S. Department of Defense contract.

FULL CHARGE: Tesla surged 11.1% after the electric vehicle maker blew past Wall Street’s fourth-quarter earnings forecasts on record sales. The company also told investors that it is ramping up production of the Model Y small SUV, which is a key product because consumers are buying smaller utility vehicles.

UP IN SMOKE: Altria slid 5.8% after the maker of Marlboro cigarettes reported a hefty costs because of its investment in e-cigarette maker Juul. Altria took a 35% stake in Juul at the end of 2018 and that company has since faced a surge in federal and state investigations into its marketing amid an explosion of underage vaping teenagers.